Why plant factories failed in a wave: the vertical-farm cost equation | Singapore Global International

In late 2024 Bowery Farming, once the most valuable vertical-farming company in the United States, ceased operations. In March 2025 Plenty Unlimited — long held up as the industry's benchmark — filed for bankruptcy protection and, after restructuring in May, narrowed its business to premium strawberries. A year earlier Infarm, AppHarvest, AeroFarms and Kalera had each shut down or filed. Why did plant factories fail in a wave? The answer is not the farming technology. It is an electricity bill.

1. Those that fell were the leaders

This wave was not small players failing at experiments. Bowery had raised more than US$700 million and was valued above US$2 billion in its 2021 round, with blue-chip venture funds and celebrity investors on the cap table; it closed for the most familiar of reasons — rising operating costs and no more funding. Plenty was the technical benchmark of the sector, and after restructuring it dropped its multi-crop strategy and kept only high-priced crops such as strawberries. The 2023 wave was denser still: Germany's Infarm and America's AppHarvest, AeroFarms and Kalera all halted or filed within a single year. The immediate consequence: funding for the whole sector dried up.

2. The real problem is one number: kilowatt-hours per kilo

A 2025 academic review put it bluntly: the high energy use of vertical farming is one of the direct causes behind recent headline bankruptcies. In a plant factory the largest variable cost is neither seed nor fertiliser but electricity — LED lighting, air conditioning, dehumidification and circulation pumps, all four running around the clock. The industry measures it with a single figure: kWh per kilogram, the electricity burned to grow one kilo of produce. Multiply that figure by your power price and you have the electricity cost buried inside every kilo you sell.

3. Singapore's version of the problem is harder

Local farms here face the same bill, but with costlier power, smaller scale and more direct competition. Public figures from local vertical farm GroGrace: about S$20,000 a month in utilities and S$15,000 in salaries, with founder Grace Lim noting that local electricity prices have doubled since 2019. The prices it must compete against: locally grown hydroponic greens at roughly S$1.80 to S$2.30 a pack versus about S$1.30 for imports from Malaysia and China — fifty cents to a dollar more per pack.

The list of local names that stopped production is not short: VertiVegies cancelled its Lim Chu Kang indoor farm plan in 2022; I.F.F.I closed its roughly 38,000-square-metre Tuas facility in April 2024; Sky Greens, Growy Singapore and others halted or scaled back too. At the same time new entrants keep arriving with larger capital — Greenphyto, a Guinness-record-certified tallest indoor vertical farm costing about S$80 million, opened in January 2026 with a stated annual output of 2,000 tonnes.

4. 30-by-30 and 'the lessons of high-tech farming'

Singapore's food policy target is '30 by 30': locally produced food meeting 30 per cent of national nutritional needs by 2030. After this wave of farm closures, Parliament asked whether the closures would delay the target, and the responsible minister reaffirmed in reply that it was always 'a challenging aspiration'. In November 2025 a Business Times commentary concluded that Singapore is resetting its food-security ambitions — and that the failures of high-tech farming offer lessons worth keeping.

5. Six questions to clear before entering

• Start with kWh/kg: turn power price, lighting hours and dehumidification load into 'electricity cost per kilo' before discussing any output figure.
• Power price matters more than equipment: a contracted tariff, access to cooling or waste-heat recovery, and off-peak rates often decide survival.
• Pick the right crops: leafy greens, herbs, strawberries, seedlings, medicinal plants — high value, short cycle. Do not use plant factories for commodity vegetables.
• Do not sell 'saves water and land' as the business case: those are ESG metrics, and they rarely become a customer's reason to buy.
• Find the buyer before building: long-term contracts with restaurants, retail chains and central kitchens save more businesses than output numbers do.
• Prove it small, then scale: validate the unit economics on one container or pilot line before talking about expansion.

6. How we see smart agriculture

Cedar's agri-tech business spans modern agriculture, the application of agri-technology, agricultural product development and supply chains, working across Southeast Asia on technology adoption, product R&D and supply-chain integration. The lesson from this wave of failures is clear to us: the value of smart agriculture is not that it looks advanced, but whether the unit cost can be calculated honestly. So when we assess a project we look at energy use and unit economics first, and at the equipment proposal second — a small plant that makes money beats a beautiful demonstration factory.

Sources: Zhongtou Net report on the closure of Bowery Farming (November 2024); Plenty Unlimited restructuring announcements (March and May 2025, PR Newswire); LightNOW, 'The 2023 CEA Rollercoaster Recap'; Springer review 'Vertical farming: productivity, environmental impact, and resource use' (2025); Tamil Murasu and 8world reporting on GroGrace and local farm costs in Singapore; Ministry of Sustainability and the Environment (MSE) parliamentary reply on 30-by-30; Business Times commentary (November 2025). Compiled and written by Singapore Global International; figures and policy positions follow the latest official releases.

Video source: the topic was raised by 'Dr Zhou talks agriculture' (周博士聊农业) on WeChat Channels, 30 August 2026, in a video titled 'Why did plant factories fail in a wave?'. This article is our own research and interpretation; no content from that video is reproduced.